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Downsizing

By | November 2008
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Downsizing
Organizations today, in their desire to be efficient and effective, have adopted many downsizing strategies. The very dynamic workplace and trend towards globalization has prompted more and more companies to resort to downsizing. Downsizing is the systematic reduction of a workforce through an intentionally instituted set of activities by which organizations aim to improve efficiency and performance (Appelbaum et al., 1987b; Cameron, 1994a; Cascio, 1993). As a result, the firms’ costs, processes and workforce are affected. According to Freeman & Cameron (1993) also, downsizing is not something that happens to an organization, but is something that some of the organization members (top management per se) undertake purposively. The key attributes of downsizing given by Freeman & Cameron (1993) are as follows: a) It is an intentional endeavor

b) It usually involves reductions in personnel
c) It is focused on improving the efficiency or effectiveness of the organization d) It affects work processes

Sometimes also termed as rightsizing, reorganization, restructuring, delayering, and rationalization, downsizing is seen as an important techno-structural Organization Development (OD) intervention (Cummings & Worley, 2001). Downsizing may involve, one or many of the following processes, a) Loss of individual security, owing to layoffs and job losses b) Emergence of new organizational form

c) Re-allocation of resources and power
d) Increased expectations, responsibilities and workload and need to re-learn and develop new skills among survivors of the exercise, and e) Redundancy among those who do not get laid off (the survivors)

Downsizing efforts are undertaken for the improvement of the organization. However, that does not imply that only the firms that are experiencing problems downsize. Firms that are growing are just as likely to downsize. Downsizing can refer to large permanent, reactive layoffs, a streamlining of functions, a...

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